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FDI attraction situation in Vietnam and Vietnam's overseas investment in the first five months of 2023

Date 26/05/2023 - 15:03:00 | 274 views
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As of May 20, 2023, the total newly registered capital, adjusted and contributed capital to buy shares and buy contributed capital of foreign investors reached nearly 10.86 billion USD, equalling 92.7% year-on-year. The capital generated by FDI projects was estimated at 7.65 billion USD, a decrease of 0.8% over the same period in 2022.

Accumulated to May 20, 2023, the whole country has 37,238 valid projects with a total registered capital of approximately 447.67 billion USD. The accumulated realised capital of foreign investment projects reached 281.65 billion USD, equalling 62.9% of the total valid registered investment capital.

Details are as follows:

I. FDI INFLOWS OF VIETNAM

1. FDI attraction in the first five months of 2023

1.1. FDI performance:

Realised capital:

As of May 20, 2023, disbursement of FDI projects were estimated at 7.65billion USD, down 0.8% year-on-year and up 0.4 percentage point as compared with the figure to the first four months of this year.

Import and export performance:

Export: Export (including crude oil) was estimated at over 102.9 billion USD, down 9.4% year-on-year, accounting for 74.1% of export turnover. Export (excluding crude oil) was over 102.1 billion USD, year-on-year decrease of 9.4%, accounting for 73.5% of the country’s export turnover.

Import: Imports of the foreign-invested sector attained more than 85.8 billion USD, down 14.1% over the previous period and accounting for 65.2% of the country’s import turnover.

Despite the decrease in export turnover in the first five months of 2023, the FDI sector saw a trade surplus of over 17.1 billion USD including crude oil and nearly 16.3 billion USD excluding crude oil, while the domestic sector had a trade surplus of nearly 8.9 billion USD.

1.2. Investment registration

As of April 20, 2023, the total newly registered capital, adjusted capital and capital contributions and share purchases of foreign investors stood at about 10.86 billion USD, equivalent to 92.7% year-on-year, and up 10.6 percentage points as compared with the figure in the first four months of this year. The newly registered capital and capital contributions and share purchases increased while adjusted capital continued falling.

Of which:

Newly registered capital: There were 962 new foreign-invested projects, valued at over 5.26 billion USD, were granted licenses, up 66.4% in number and 27.8% in value year-on-year.

Adjusted capital: There were 485 turns of project registering to adjust their investment (up 22.8% on-year) with a total additional capital of about 2.28 billion USD (down 59.4% year-on year).

Capital contributions and share purchases: There were 1,278 capital contributions and share purchases by foreign investors (down 5.6% year-on-year) with a value of nearly 3.32 billion USD (up 67.2% year-on-year).

(Detailed data in Appendix I attached)

By sector:

Foreign investors poured funds into 18 out of 21 sectors in the national economic classification system, of which the processing and manufacturing industry took the lead with over 6.64 billion USD, making up 61.2% of the total and decreasing 2.5% year-on-year. Banking and finance came next with a total investment of over 1.53 billion USD, accounting for 14.1% of the total and rising 12 times compared to the same period last year. Followed were real estate and science and technology, with 1.16 billion USD (down 61.3%) and about 481 million USD (up 28.3%) respectively.

It is also worth noting that processing and manufacturing was the sector with the largest number of newly-registered projects (29.5%) and capital-adjusted projects (55.1%). Wholesale and retail led in the number of capital contributions and share purchases (accounting for 41.3%)

By counterpart:

There were 82 countries and territories investing in Vietnam in the first five months of 2023. Singapore remained Vietnam’s leading source of foreign investment with over 2.53 billion USD, making up 23.3% of the total FDI registered in the country (down 14.3% year-on-year). Japan came second with nearly 2.1 billion USD, making up 19.1% of the total, and 2.2 times more year-on-year. China came third with a total registered investment capital of nearly 1.61 billion USD, accounting for 14.8% of the total and rising 41.9% on-year. Next were Taiwan (China), Hong Kong (China), Republic of Korea (RoK) and so on.

Regarding the number of projects, the RoK topped the list when it comes to the number of newly-registered projects (accounting for 17.4%); turns of capital adjustment (25.2%) and capital contributions and share purchases (28.5%)

By location:

The foreign investors had invested in 50 provinces and cities nationwide in the first five months of 2023. Hanoi led the way with a total registered capital of nearly 1.87 billion USD, making up 17.2% of the total and rising nearly 2.7 times over the same period in 2021. Bac Giang ranked second with over 1 billion USD, making up 9.4% of the total and increasing 3 times compared with the figure in the same period last year. Next were Ho Chi Minh City, Binh Duong, Dong Nai and so on.

Ho Chi Minh City remains leading city in number of new projects (38.9%), turns of adjusted-projects (24.9%) and capital contributions and share purchases (65.4%).

(Detailed data in Appendix II attached)

2. Evaluation of the FDI performance in the first five months of 2023

- The realised investment capital of FDI projects decreased compared to the same period last year but it was improved compared to the previous months (down 0.8% year on year, up 0.8 percentage points compared with the figure in the first four months, up 1.2 percentage points compared with the figure in the first three months and up 4.1 percentage points compared with the figure in the first two months).

- The newly-registered capital shot up compared with the figure in the first four months of the year. The number of new projects slightly increased by 1.2 percentage points compared with the figure in the first four months but it strongly increased compared with the figure in the previous months of 2023 (up 66.4%). The growth rate of new projects was larger than that of total investment capital, which shows that: (i) small and medium-sized enterprises continued to pay attention to and had confidence in the investment climate of Vietnam to expand operation; (ii) large corporations were considering their business regarding the impact of Global Minimum Tax policy. The number of under-1-million USD projects accounted for nearly 70% of the total number of foreign-invested projects registered in Vietnam in the first four months of this year, but its value only making up 2.2% of the total.

- Newly-invested projects still focus on cities and provinces that have more advantages such as infrastructure, stable human resources, efforts to reform administrative procedures, and active investment promotion, like Hanoi, Bac Giang, Ho Chi Minh City, Binh Duong, Dong Nai, Bac Ninh and Hai Phong.

- Asian and traditional investors accounted the most proportion (Singaporean, Japanese, Chinese, Taiwanese (China), Hong Kong (China) and South Korean). These six partners accounted for 76.6% of total national investment capital in the first five months).

- Adjusted capital still decreased compared to the same period last year (59.4%) due to few projects adjust their investment, but the decline rate was improved month-on-month. The turn of projects with capital adjustment increased sharply (up 22.8% year-on-year) instead of up by 19.5% in the first three months and down 6.3% in the first two months this year, affirming investors’ confidence in the country’s investment environment and their decisions to expand business.

- Although export of the FDI sector decreased, it posted a trade surplus and offset the trade deficit of the domestic business sector. With a trade surplus of over 17.1 billion USD (including crude oil) and nearly 16.3 billion USD (excluding crude oil), the FDI sector offset the trade deficit of 8.9 billion USD of the domestic business sector, helping the country have a trade surplus of about 8.2 billion USD.

3. Accumulated foreign investment as of May 20, 2023

Accumulated as of May 20, 2023, the whole country has 37,238 valid FDI projects worth nearly 447.67 billion USD. The accumulated realised capital of FDI projects is estimated at about 281.65 billion USD, equalling 62.9% of the total valid registered investment capital.

- By sector: Foreign investors have invested in 19 out of 21 sectors in the national economic classification system, in which the processing and manufacturing accounted for the highest proportion with more than 266.9 billion USD, accounting for 59.6% of the total investment capital. It was followed by real estate sector with over 67.1 billion USD (representing 15%); electricity production and distribution with more than 38.3 billion USD (or 8.6%).

- By counterpart: There are 143 countries having valid investment projects in. In which, the RoK ranked first with a total registered capital of nearly 81.6 billion USD (accounting for 18.2% of the total). Singapore ranked second with about 73.4 billion USD (representing for 16.4%). Next were Japan, Taiwan (China), Hong Kong (China) and so on

- By location: FDI has been present in all 63 provinces and cities nationwide, of which Ho Chi Minh City remains the leading province in attracting foreign investment with over 56.7 billion USD (accounting for 12.7% of the total investment capital), followed by Binh Duong with about 40 billion USD (or 8.9% of the total investment capital), Hanoi with more than 39.2 billion USD (representing 8.8% of the total investment capital).

(Detailed data in Appendix III attached)

II. FDI OUTFLOWS OF VIETNAM

In the first five months of 2023, Vietnam’s total newly-registered and additional investment were approximately 316.4 million USD (equalling 93.5% year on year). Of which, 45 projects were granted new investment registration certificates, with total registered capital of over 142.7 million USD (equalling 48.6% year on year); and 16 projects registered to adjust their investment with additional capital of 173.7 million USD (3.9 times more year on year).

Vietnamese investors have invested in 13 sectors abroad. Of which, wholesale and retail took the lead with 15 newly-registered projects and 5 times of adjusting investment capital, with total registered capital of nearly 147.7 million USD, accounting for 46.7% of the total. Next came information and communication with over 108.5 million USD, accounting 34.3%. Followed by agriculture, forestry and fishery industry; processing and manufacturing, and so forth.

There were 20 countries and territories receiving investment from Vietnam in the first five months of 2023. Leading is Canada with 01 newly-registered and 01 capital-adjusted projects with the total registered capital of over 150.2 million USD, accounting for 47.5% of the total. Followed by Singapore, Laos and Cuba.

Accumulated as of May20, 2022, Vietnam had 1,648 valid aboard investment projects with total registered investment capital of about 22.1 billion USD. In which, there are 141 projects of state-owned enterprises with a total investment of nearly 11.67 billion USD, accounting for 52.8% of the country’s total investment capital.

Vietnam’s investment aboard focuses mainly in: mining (31.5 %); agriculture, forestry and fishery (15.6%). The areas receiving the most investment from Vietnam were Laos (24.4%); Cambodia (13.3%); and Venezuela (8.3%)./.

(Detailed data in Appendix IV and V attached)

 


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